Nishith Desai Associates Hotline: Stressed assets: Regulators initiate tough measures

The volume of stressed assets in the banking system in India has been at an all-time high. India ranks at 130 out of 190 countries in the “Doing Business” rankings of 2017 which are prepared by the World Bank. Much of this has been due to the inefficient mechanism of resolving insolvency in India. The Government has been keen to implement measures to tackle these inefficiencies and streamline the processes surrounding insolvency resolution.

Despite such measures for facilitating insolvency and bankruptcy, banks were using their discretion to refer only those accounts for resolution proceedings which they deemed fit.